The Nigerian naira faced mixed fortunes on Wednesday, April 3, 2025, depreciating at the official market while remaining stable on the parallel window.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local currency closed at N1,552.53 per US dollar, down from Tuesday’s rate of N1,531.25/US$.
However, at the parallel market, the naira held firm at N1,550/US$ for the second consecutive day. This stability comes amid continued interventions by the Central Bank of Nigeria (CBN) to curb volatility in the forex market.
Against other major currencies, the naira also showed a mixed performance. It remained unchanged against the British pound, closing at N2,005/GBP on both Tuesday and Wednesday. The naira strengthened slightly against the Euro, appreciating to N1,655/EUR from N1,660/EUR the previous day.
Similarly, it held steady against the Canadian dollar at N1,110/CAD over the two-day period and remained unchanged at N215/CNY against the Chinese yuan.
Market analysts warned that the naira may experience further pressure due to increasing demand for foreign exchange, particularly for school fees, overseas travel, and fuel imports. The country’s forex liquidity remained a concern, especially with delays in finalizing the naira-for-crude oil deal between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery.
Despite these challenges, Nigeria’s foreign exchange reserves have reached a three-year high. Over the weekend, the CBN reported that the Net Foreign Exchange Reserve (NFER) stood at $23.11 billion. This marks a significant improvement from previous years, with net reserves standing at $3.99 billion at the end of 2023, $8.19 billion in 2022, and $14.59 billion in 2021.
However, despite this recovery in external liquidity and a reduction in short-term obligations, market confidence remains subdued. Investors continue to express concerns over the country’s forex policies, inflationary pressures, and the overall economic outlook.
While the CBN’s interventions have provided some level of stability in the parallel market, the depreciation at the official window highlights ongoing structural issues within Nigeria’s forex market. Experts suggest that sustained policy measures, improved foreign investment inflows, and economic reforms will be necessary to ensure long-term currency stability.
